Once
upon a time — June 16, 1972 to be exact — Miki Kaipaka got a
building permit valued at $21,000 to construct a 1,456-square-foot
house with three bedrooms and two baths on the Wainiha River.
Twenty
years later, Peter Vollman bought the house for $490,000. It was
advertised in the MLS listing as:
“AFFORDABLE
OCEANFRONT, JUST REDUCED FROM $750K TO MEET RECESSION MARKET!! MUST
SEE TO BELIEVE THIS DELIGHTFULLY LIVEABLE WITH OUTRAGEOUS VIEWS!
OWNER FINANCING! FIREPLACE!
In
2002, Vollman Limited Partnerships sold the house for $600,000 to
Craig and Karen Mills. Though county records show permits had been
issued only for a fence and minor hurricane repairs in 1993, the
sales listing indicated that other changes had been made (emphasis
added):
Oceanfront
3bd/2ba home completely renovated
enjoy spacious living room w/sliding glass windows &
private deck. Fireplace, A/C, 6 ft
wood fence, elec gate. Big ocean views.
Over
the next three years, the house went through an even more dramatic
transformation, though again, county records show no building permits were
issued for any of the work. When Victoria Anne
Leadley bought it for $1.475 million in 2005,
it was described in the sales listing as
having three bedrooms, three baths and a 560-square-foot lanai:
Remarks:
Sometimes oceanfront, this
home was completely rebuilt--inside and out--with
the very best of everything. Travertine floors (including the lanai),
marble baths, fantastic kitchen with granite countertops and
stainless steel appliances. Two master suites, each with double
lavatories and oversize doorless walk-in shower. A truly luxurious
property in a unique location. Wonderful artist neighbors on both
sides. On the Wainiha River with a spit of sand between you and the
ocean. A dock for your kayak, and a
large lanai for enjoying it all!
Furnishings are separate from sale.
Private
Remarks: Call for viewing
instructions. House is in vacation rental.
This is not the house you remember. The new floor plan, renovations,
and decor will astonish you and your clients.
Plan to spend a bit of time sitting on the lanai to appreciate the
ever-changing view.
Today
the house is again for sale — for $2.579 million. So why, you may
ask, has it increased so substantially in value, even though the
market is down? Well, it's got a bona fide vacation rental permit now. And as Realtor Jane Abramo discloses in her current listing, it has some new structures, too, though again, no record could be found of any permits:
Remarks:
Kauai Paradise House. This lovely home is a must see. This is a very
successful and fully permitted vacation rental. TVNC-1266. All
vacation rental reservations, preferential VRBO status, plus separate
targeted website are being sold with the property. Recent
upgrades include a new 200 square foot front lanai, expanded 600
square foot covered back lanai with travertine tile, 150 square foot
deck above the river, a brand new roof, fresh paint inside
and outside, new fencing and tropical landscaping. This
meticulously renovated private oceanfront retreat on the North Shore
of Kauai in Wainiha is perfect for short or long-term getaways for
family or friends seeking luxurious accommodations with majestic
views. Discover the relaxing elegance of Kauai, where hectic modern
life is a remote memory and tropical splendor is your reality.
Lovingly refurbished on a private, fenced lot nestled at the edge of
the breath-taking Pacific, Kauai Paradise House boasts its own
exclusive beach, panoramic views, elegant Tommy Bahama furniture,
opulent travertine tile floors, 3 suites with 3 marble bathrooms (1
in each bedroom for the ultimate in intimacy), gourmet
stainless-steel and granite kitchen with bar seating, built in
convection oven and microwave, plus trash compactor. A
vaulted-ceiling soars over the great room with wrap around sofas and
hidden armoire entertainment center. The living room and separate
dining area lead out to a covered lanai for the BBQ with couches for
intimate conversations, and seating and table for alfresco dining,
lush tropical backyard landscaping with coconut, ginger, avocado and
palm trees, a secluded sun deck, and your own boat dock. Soak in
unparalleled views of the river, the sandbar and the deep blue of the
Pacific Ocean from every room. There's nothing left to do but take
possession. All showings subject to 48 hour notice if the home is
occupied by vacation guests.
As
an aside, the “exclusive beach” that Jane is falsely hawking —
all beaches in Hawaii are public, which she surely must know — just so happens to be the same little sand spit where the county bulldozed fishing shacks belonging to Native Hawaiians three years ago.
Though
the house was being used as a vacation rental when Leadley
bought it in 2005, the county did not pass a law authorizing TVRs
until 2008. In order to qualify for a permit, a house had to be in
compliance with federal flood rules and the county Special Management
Area law. Owners were also required to prove they had a General
Excise license, and had been paying taxes on the rental. Furthermore,
all building permits had to be up to date, and the property was
supposed to be inspected to ensure that everything was kosher.
However,
that property's TVR application included no records of “occupancy
and tax documents, including all relevant State of Hawai‘i general
excise tax filings, all relevant transient accommodation tax filings,
federal and/or State of Hawai‘i income tax returns for the relevant
time period, reservation lists, and receipts showing payment,”
as required under the county ordinance.
Instead,
an unsigned lease was submitted as
“evidence” of rental history, even though the document clearly
states, “This lease is not valid unless signed by tenant and
agent.” Leadley also submitted a signed and notarized affidavit
swearing that building permits were issued for all the structures on
the property, and “there were no expansions, alterations,
improvements or uses contrary to State and County land use and
planning laws.”
And though the county TVR log shows an inspection date of March 18, 2009, no inspection report was included in the file.
Yet
somehow, Leadley got her TVR permit. Former deputy planning director
Imai Aiu approved her application, using the same form letter
that appears in numerous other TVR files.
Curiously, though an inspection report was included in Leadley's most recent renewal application, it was blank.
Now, bear in mind that this house is still served by a cesspool, and it also sits in the flood plain. Under federal law, if a house is significantly altered, it must be brought into compliance with the 1981 federal flood standards. But since no building permits were issued for the complete re-do — not even the bogus “unsubstantial improvement” permits that I exposed previously on PIKO — it still does not meet flood standards.
Now, bear in mind that this house is still served by a cesspool, and it also sits in the flood plain. Under federal law, if a house is significantly altered, it must be brought into compliance with the 1981 federal flood standards. But since no building permits were issued for the complete re-do — not even the bogus “unsubstantial improvement” permits that I exposed previously on PIKO — it still does not meet flood standards.
Yet the property has a TVR permit for life, so long as the subsequent
owners continue to send in their renewal applications — a benefit
that added a cool $1 million to the value of the house.
It's
worked out great for Leadley, and the realtors. But about what the community,
the natural environment? Are either well-served by having a
non-conforming commercial use too close to the ocean and a river? And
what about the unsuspecting tourists who rent it, including the
Canadian man who recently jumped to his death off that unpermitted
deck?
After
I first reported the lack of building permits for the property, I sent an email to
planning director Mike Dahilig asking what actions his department was
going to take. He replied, “I have cc-ed
[county spokeswoman] Beth Tokioka on this e-mail and she will be
heading our response.” Beth replied, “The Planning Department is
investigating the situation and has no conclusions to report at this
time.”
Since then, I had a chance to dig into the TVR file, where I found these additional irregularities. Perhaps
it's time for county Prosecutor Justin Kollar to launch his own
investigation. Because it sure seems like something fraudulent is
happening here. And as I will show in upcoming posts, this is not an
isolated incident.






